Donor Sues Georgetown for $7.5 Million

DALLAS (CN) – A Dallas businessman sued Georgetown University for $7.5 million, claiming it reneged on its promise to name the law school gym after him in exchange for his donations. Scott K. Ginsburg sued Georgetown University in Federal Court. He claims he agreed in 2000 to donate $5 million to the school-his alma mater-for naming rights of the newly constructed building at the Georgetown University Law Center. But Georgetown weaseled out of the deal after the SEC secured an inside-trading judgment against him, Ginsburg says, though the school continued to solicit him for money. Ginsburg claims that the school agreed in 2000 that his name “shall be prominently etched and displayed above the main entrance of the fitness center in a manner (and with similar boldness, prominence and importance) similar to that of the Edward Bennett Williams Law Library, the Bernard S. & Sarah M. Gewirz Student Center and Bernard P. McDonough Hall.” He claims the school also agreed to recognize him inside the center, with a mutually agreed-upon description and photo portrait, and that his full name would be mentioned when the center is referred to. He says Georgetown issued a press release in September 2000, announcing the construction of the Scott K. Ginsburg Health and Fitness Center. But the school wavered after the SEC secured a judgment against him in 2002, accusing him of feeding insider information to his father and brother, Ginsburg says in the complaint. He says the SEC sued him in 1999, around the time that Georgetown was soliciting his donation. “Ginsburg was fully candid with Georgetown about this legal issue prior to the agreement,” the complaint states. “At the time Georgetown was first courting him as a donor, it assured him that this situation was not a problem for the university and went ahead with the agreement. Indeed, Georgetown never expressed any concern about Ginsburg’s issues with the SEC during their initial pursuit of him and during the preparation of the agreement.” But Ginsburg says that after the SEC judgment against him, Georgetown asked him to amend the contract and relinquish the naming rights. He says he refused. Ginsburg claims Georgetown told him it would honor his naming rights and continued to solicit donations from him. This resulted in a second contract, signed in June 2003, in which Ginsburg pledged another $11 million, he says. “Ginsburg was invited to join the Georgetown Board of Visitors, welcomed to university functions, invited on university trips and generally embraced by the university, all with the goal of extracting ever more money from him,” the complaint states. “The gift agreement also integrated Ginsburg’s remaining payments under the earlier agreement, while not modifying any obligations under that agreement.” Now a decade had passed and the school has not named the center after him, Ginsburg says. He claims he demanded performance in 2010, which was followed by “months of ineffective communication” and a meeting with Georgetown President John J. DeGioia. “At this meeting, DeGioia told Ginsburg that ‘you will be mad at me but I do not have any recollection’ of their correspondence or Georgetown’s commitments to Ginsburg about naming the center,” the complaint states. “It is now apparent that since 2002, Georgetown not only was not in fact committed to recognizing Ginsburg’s generosity by naming the sports center for him, but each of the foregoing oral and written representations to him about its claimed commitment was false, made only to entice him to give Georgetown more money.” Ginsburg is the chairman and CEO of DG Fastchannel, digital media distributor, according to his website. He co-founded radio broadcasting company Chancellor Media Corp. in 1997 with Dallas businessman Tom Hicks. In 1998, he founded the Boardwalk Auto Group, which owns Porsche, Audi, Volkswagen, Ferrari, Maserati and Lamborghini dealership in the Dallas-Fort Worth area. He seeks $7.5 million and punitive damages for breach of contract, fraud and fraudulent inducement. He is represented by John Cox with Lynn Tillotson of Dallas.